President Joe Biden blamed Trump on Monday for the recent failure of the Silicon Valley Bank and Signature Bank, which collapsed over the weekend.
SVB is the largest bank to fail since the 2008 mortgage crisis, and Biden quickly blamed it on Former President Trump, who has not been in office in years.
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The president started by throwing a jab at Trump through implication, given the constant attempts to catch Trump doing something illegal, saying, “no one is above the law,”
“We must get a full accounting of what happened and why so those responsible can be held accountable. In my Administration, no one is above the law.”
We must get a full accounting of what happened and why so those responsible can be held accountable.
In my Administration, no one is above the law.
— President Biden (@POTUS) March 13, 2023
Biden then made himself very clear, calling Trump out explicitly.
“We must reduce the risk of this happening again. During the Obama-Biden Administration, we placed tough requirements on banks to make sure the crisis we saw in 2008 wouldn’t happen again. Unfortunately, my predecessor rolled some of those back. I will ask Congress and banking regulators to strengthen the rules for banks to make it less likely that this kind of bank failure happens again. We must protect American jobs and small businesses.”
I will ask Congress and banking regulators to strengthen the rules for banks to make it less likely that this kind of bank failure happens again.
We must protect American jobs and small businesses.
— President Biden (@POTUS) March 13, 2023
Aside from the fact that there were no significant bank failures during Trump’s term with the same reduced regulations, many on Twitter pointed out that Biden’s policies may have contributed to the incident.
One user pointed out that Trump replaced the regulations he struck, which Biden revoked.
— Lfoxy23 🇺🇸💙✠(@lfoxy23) March 13, 2023
Others pointed out that the interest rate hikes made necessary by Biden’s inflationary policies are likely to blame.
And this guy for raising rates too fast.
Which broke the system pic.twitter.com/5O0AmmiwbN— CyberCodeTwins (@cybercodetwins) March 13, 2023
Your administration forced banks to buy low interest rate treasuries as reserves right into run away inflation! You own this!!!!
— Bryan Beatty (@BryanB8) March 13, 2023
Another user pointed out that even if Trump contributed to the failure somehow, Biden has been in office long enough to have fixed it by now.
You’ve been in long enough to roll these back. Stop passing the buck – literally.
— banthebbc (@banthebbc) March 13, 2023
Fox News Business found that SVB overinvested in treasury bonds and fixed-income securities, which predictably nosedived in value as interest rates increased.
In the American Institute for Economic Research, Peter Earle wrote about how easy it was to see the issue coming down the pike.
“…as of late December, SVB held 57 percent of its total assets in investments while the average among 74 similar competitors was about 42 percent. Of those investments, $108 billion were in US Treasury and agency securities — an asset class which had its worst year on record in 2022.”
With these warning signs, government regulators should have identified the threat and been on high alert. Instead, according to Fox News Business, the Financial Stability Oversight Council had other priorities.
“The council last met on February 10 via videoconference. The readout of that meeting shows the group previewed its 2023 priorities, which included “climate-related financial risks, nonbank financial intermediation, Treasury market resilience, and risks related to digital assets.””
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Biden has since promised to help those banking with SVB recover, even those who weren’t ensured. Many have characterized this move as a bailout, if not for the bank itself, for the individuals who trusted it, and its behavior.
— Against late capitalism 🪶 (@Inhumansoflate1) March 13, 2023
Speaker Kevin McCarthy Rejects Biden’s 6.9 Trillion Dollar Budget Proposal
